WASHINGTON - President Obama is expected to use his budget unveiling today to flesh out his threat last month to curb runaway college tuition increases - potentially by withholding federal student aid from those colleges that fail to keep prices down.
Making a direct appeal to middle-class voters, Obama used his State of the Union address and a key swing-state appearance days later at the University of Michigan to strike a theme that resounds with nearly every parent, college student, and laid-off worker seeking continuing education.
“We are putting colleges on notice,’’ Obama said in Ann Arbor. “You can’t assume that you’ll just jack up tuition every single year.’’
The federal government, he said, “can’t just keep on subsidizing skyrocketing tuition,’’ which has roughly doubled the pace of inflation in recent years, according to the Bureau of Labor Statistics.
Total student loan debt has surpassed credit card debt for the first time. And students who graduated in 2010 had an average student loan debt of $25,250 - up 5 percent from the previous year - while facing a 9.1 percent unemployment rate, the highest jobless level for new graduates in recent history, according to the Project on Student Debt.
Obama is pushing his multipronged college affordability plan in the midst of his campaign for reelection. But although this is a “bread-and-butter middle-class issue,’’ Obama’s bid for voters affected by high college costs will not come easily, given the complexities surrounding tuition levels and the limited levers that government has, said Andrew P. Kelly, a research fellow in education policy studies at the American Enterprise Institute.
None of the candidates for the Republican nomination has responded to Obama’s initiative. Political analysts expect the eventual GOP nominee to cast the president’s plan as an overreach of the federal government into the business of higher education.
“It’s a bit of a communication challenge for the president,’’ Kelly said. “The real thing to watch is whether it’s cast in a way that resonates with the middle class, who are watching their purchasing power in higher education slowly erode.’’
While Obama sought to allay parental concerns by announcing additional billions in financial aid to be distributed to schools that best hold down costs and graduate the neediest students, the president has set off alarms among higher-education officials sensitive to any proposals that resemble price controls.
Public university leaders say they have little choice but to raise tuition in the face of declining state support. Private university officials claim few students pay the full sticker prices, which are necessarily inflated to subsidize the cost of attendance for lower-income students.
“He’s hit a hot button here,’’ said Robert Caret, president of the University of Massachusetts system. “The message he’s putting out there will garner a wide spectrum of support from lower-income to upper middle-income strata voters. But it’s complex, so let’s not try to solve it by simple means that make it worse.’’
More information about the plan is expected to be in the president’s budget when it is released today. The president is aware that he needs to walk a fine line between boosting aid to needy students and being cognizant of critics who, perhaps unfairly, blame federal aid for encouraging colleges to boost tuition costs, analysts say, which explains why Obama’s plan includes both rewards and penalties.
The plan would increase the amount of campus-based financial aid: Perkins loans, low-interest government loans for low- and middle-income students; Supplemental Educational Opportunity Grants, a subsidy for needy students that requires no repayment; and campus-based work programs.
It would also change the formula calculating how federal financial aid is distributed, by shifting money away from schools with rising tuition to campuses holding tuition increases down. Administration officials said it would be the first time that the federal government has tied federal campus aid to campus tuition policies, in the unlikely event that a grid-locked Congress passes Obama’s proposals.
Public and private colleges and universities in Massachusetts are authorized to receive about $80 million in Perkins loans and $28 million in Supplemental Educational Opportunity Grants in the current school year, said Richard Doherty, president and chief executive of the Association of Independent Colleges and Universities in Massachusetts. It remains unclear how the funding would change under Obama’s proposal.
“There is some concern that has been raised about the federal government getting into price control,’’ Doherty said. “But we don’t know yet because we haven’t seen the language.’’
Last Monday, Vice President Joe Biden promoted Obama’s plan during a visit to Florida State University, after which the chancellor of the university system issued a statement calling the president’s proposal “extremely unfair.’’
In Boston that same day, Secretary of Education Arne Duncan and Massachusetts Senator John F. Kerry met privately with a small group of local university presidents to hear their concerns. Imposing a tuition cap on universities - particularly public ones that receive a smaller percentage of state dollars each year - would adversely affect the quality of education, said Joseph Aoun, president of Northeastern University, a private school, and incoming chairman of the board of directors of the American Council on Education.
Some higher-education officials found fault with other elements of Obama’s plan and decried as overly simplistic his proposal to create a federal report card for each school to make it easier for prospective students to compare price, financial aid, graduation rates, and earning outcomes. Others criticized his proposal to provide more than $1 billion in challenge grants to spur higher-education reform as a dangerous assault on the unique missions inherent to a diverse array of institutions.
The dismal economy has allowed the college affordability issue to become more important in public opinion polls, said David Winston, a Republican pollster supporting Newt Gingrich. Although jobs and the economy are still the top concerns of most voters, higher education ranks just below that, in the same tier as health care, retirement, and the national deficit, he said.
“For every American parent, truth be told, the symbol of ultimate success is if you can get your child through college,’’ Winston said. “Part of the challenge to the president is to create an economy so that there is a job waiting for you after graduation.’’
Michael Mello, a physician from Dartmouth and independent voter, said he finds much of Obama’s plan appealing and praises the president for raising the issue. His eldest daughter is a sophomore at the University of Iowa, and he has three more children about to enter the college pipeline.
“You can’t just keep raising the price of tuition without there being consequences,’’ Mello said.
Mello, who disagrees with Obama’s economic policy, said he is inclined to vote for Mitt Romney, should he become the Republican nominee - “though I would like to hear something from Republicans that would take a similar approach to tuition.’’
Whatever the fate of Obama’s initiative, it is likely to catch the attention of students.
Greg DeSocio, a student at Boston University and head of its Republican club, said he approves of Obama’s plan, but not enough for him to vote for Obama.
“It will probably excite his liberal base to go out and vote for him, because college students are historically apathetic when it comes to voting,’’ DeSocio said.